Author Archives: Annie Petsonk

ICAO's decision today on aviation emissions offers the prospect of the world's first carbon cap on an entire global sector.

The United Nations agency for aviation today launched a three-year effort to achieve a global market-based measure to cap the climate pollution of international aviation.

After nights of lavish receptions – a testament to the financial robustness of international aviation – delegates finally got down to the hard work of negotiating a resolution on how ICAO will tackle the climate change issue.

One step forward, half a step back

The decision by the 38th General Assembly to develop, by 2016, a global market-based measure capping international aviation’s carbon pollution at 2020 levels is a step forward on the path to averting dangerous climate change. If it were a country, aviation would rank in the world’s top ten largest emitters, and it is one of the fastest growing sources of global warming pollution.

With this decision, ICAO has opened a door to the possibility of a future global cap on these emissions and an array of programs – including a market-based measure sought by both the industry and the environmental community – to ensure that the cap is met.

However, a bedrock principle of international law is that nations have the sovereign right to limit pollution emitted in their borders. So, ICAO’s attempt to narrow the ambit for countries to implement their own market-based measures to cap and cut the burgeoning global warming pollution from international aviation pushed it half a step back.

Differences erupt in waning hours

Deep differences between and among countries erupted in the waning hours at the just-concluded Assembly, including disagreements about how and even whether to complete this task. At several points the meeting seemed destined to disintegrate.

An acrimonious vote on whether countries could bring aviation emissions under their national emissions trading system nearly caused the meeting to disintegrate.

In the end delegates agreed 1) nations should seek the agreement of other nations before imposing their market-based measures on flights from those other nations; and 2) such national market-based measures should exempt flights to and from nations whose flag carriers hold less than 1% share of the global market, measured in “revenue-ton-kilometers.”

Next steps

Remember – this decision is only a first step, but it is an important one because it provides a path forward for a cap on the aviation sector.

Now it’s time to shift to the hard work of designing the global market-based mechanism and getting 191 countries to agree to it.

Intensive efforts will be needed to make ICAO’s promise a reality. It’s not the time to let up, and ICAO can’t be let off the hook.

Airlines’ goal of “carbon-neutral growth from 2020” could be so readily affordable that governments justifiably could hold airlines to a much tighter emissions target. Image source

Our analysis comes on the heels of a consolidated industry call for the governments of the International Civil Aviation Organization (ICAO) to commit, at their next triennial September meeting, to adopt a mandatory global program to limit aviation’s carbon pollution by 2016 at the latest.

While forecasts are inherently uncertain, best estimates indicate that while new technologies, operations and infrastructure can help industry dampen emissions growth, substantial increases in aviation emissions are likely after 2020. Consequently, to meet their proposed mandatory goal of "carbon-neutral growth from 2020," it is very likely that airlines will need some kind of carbon offsetting mechanism.

An offset mechanism that limits credit supply to high-quality carbon units currently available and expected to come on-line in the future, could let airlines meet their emissions target at very modest cost. If governments adopt tough criteria ensuring that offsets represent real reductions in net carbon emissions, and if industry moves swiftly to capture those carbon units, the costs to airlines could be quite low – e.g., less than 0.5% of projected total international airline revenue in 2015, and less than a third of the fees airlines collected last year for checked bags, legroom and snacks.

In the current round of talks, the aviation industry is asking governments to mandate caps on airlines’ emissions at 2020 levels. Our analysis finds that a well-designed, high-integrity carbon offset program would make carbon-neutral growth from 2020 so affordable, that governments justifiably could hold airlines to a much tighter emissions target. That could mean putting back on the table a target the industry had proposed several years ago, namely cutting emissions 50% by 2050.

These findings show that the international aviation sector can control its CO2 emissions easily and cheaply by using market based mechanisms. The relatively small cost and ability to pass any costs through into ticket prices, should encourage the international aviation sector to accelerate and deepen its emission reduction pledges. More ambitious emission reductions now look much more doable, than mere stabilization from 2020.

Our analysis offers context to the costs of such a global market-based mechanism using offsets with strong environmental integrity, which the aviation industry called on ICAO last month to adopt to keep the industry’s net emissions stable from 2020 on. Such an offset program would allow the airlines to meet their emissions targets by both making emissions cuts within the aviation sector, and drawing on offsets that represent real emission cuts in other sectors.

Blog-exclusive addendum: effect on ticket prices

A well-designed global offset program, using high-quality offsets that represent real reductions in emissions, could add only a few dollars to a typical international fare:

Greenhouse gas emissions from airplanes are no small matter: if the aviation industry were a country, it would be the seventh largest emitter of carbon dioxide in the world – and a new report shows us the worst is yet to come.

The report released today out of Manchester Metropolitan University shows international aviation emissions are projected to increase by anywhere from a substantial 50% to a whopping 500%, and that means the aviation industry won’t be able to get anywhere near meeting its own modest commitments to reducing its emissions – unless it adopts a global market-based measure.

The aviation industry has voluntarily committed to achieve no net increase in emissions from 2020 onward and to halve its emissions by 2050 from its 2005 levels through, it says, efficiency improvements including improved air traffic management, on-board technologies and biofuels.

However, the study, from Professor of Atmospheric Science and Director of Centre for Aviation, Transport, and the Environment (CATE) David Lee, Ph.D., shows emissions from the sector are projected to roughly triple, and make it impossible for airlines to meet their own commitments. Even with speculatively optimistic scenarios for such efficiency improvements, Lee found:

None of the measures, or their combinations, for any growth scenario managed to meet the 2020 carbon-neutral goal, the 2005 stabilization of emissions goal, or the 2005-10% stabilization of emissions goal at 2050.

The maximum reductions over [business-as-usual] technology and operational improvements were clearly achieved by the extension of the existing [market-based measures] out to 2050. (page 22)

This means the aviation industry is now facing a huge gap betweenemissions it can reduce through efficiency improvements and its goal of carbon neutral growth from 2020.

Just take a look at this telling figure from Lee's report, which shows that even under the most optimistic technological scenarios for improving the efficiency of international aviation, emissions for the years 2006-2050 are expected to increase dramatically:

As Figure A1 from the report shows, even under the most optimistic technological scenarios for improving the efficiency of international aviation, emissions for the years 2006-2050 are expected to increase dramatically. The most aggressive uptake of operational and other technologies as well as biofuels still yields a yawning gap between projected emissions (lower boundary of green shaded area) and the emissions targets on the table, whether those are the targets proposed by governments (horizontal pink lines) or by the industry itself (horizontal grey ladder). Source

So, how can the aviation industry bridge the gap?

Industry spokespeople assert that from 2021, this gap could be filled through a market-based measure. However, the industry also seems to want to delay developing any serious global market-based approach until the gap is looming to be filled.

Lee sees the handwriting on the wall: there is no other way to fill the emissions gap than market-based measures. Our European colleagues at Transport & Environment agree, saying:

The only remaining means to bridge this emissions gap would be to extend market based measures like emissions trading on a global basis.

This measure already has support from EU Climate Commissioner Connie Hedegaard, as well, who said last week in a trip to the United States, that that "we of course want a global, market-based mechanism" for reducing aviation emissions.

The gap will need to be filled, and the time to construct the gap-filling mechanism is now. Lee’s study makes crystal clear the futility of waiting until 2021 to construct the market-based measure, as the airlines have advocated. If airlines simply delay dealing with the issue until 2021, when demand for gap-fillers takes off, they risk substantially higher prices for filling those gaps. And in an industry famous for its thin profit margins, delay – and its attendant higher costs – really isn’t a welcome option.

Airlines that want the flexibility to determine how best to meet the gap – for example, those that want to begin saving emissions now, in order to draw on those reductions for the future – ought to throw their weight behind the development of a global market-based mechanism in the International Civil Aviation Organization (ICAO).

Airlines, countries — including the United States – and environmental groups have all agreed aviation emissions should be addressed in ICAO, so we’ll be looking to the Administration to reach a global agreement, and to reach it quickly.

I want to tell you what happened over the weekend while no one was looking.

The U.S. Senate passed a bill early Saturday that gives the Administration unheard-of authority to ban U.S. companies from complying with another country’s law. (Photo credit: Flickr user WallyG)

At a few minutes before 2 a.m. on Saturday, just after the U.S. Senate wrapped up its wrangling over the latest funding resolution, a rather extraordinary bill was passed by the Senate.

If the bill is enacted, it would appear to be the first time in our nation's history that Congress has given sweeping authority to a cabinet member to prohibit U.S. companies from complying with the duly enacted law of another nation – and on top of that, to bail out firms that do comply or that get hit with penalties if they don't.

There are only a very few instances in America's recent history in which Congress has prohibited U.S. companies from complying with the laws of other nations. The purpose of those laws is to prevent U.S. firms from being used to implement policies of other nations that run counter to U.S. policy; they include the prohibitions on doing business in South Africa during the period of apartheid, and the anti-boycott laws, which prohibit U.S. firms from furthering boycotts of one country by another, and nowadays cover the Arab League boycott of Israel.

So, what action by a foreign nation was so odious that the Senate found it necessary to give a Cabinet secretary authority to prohibit U.S. firms from complying with it – and to bail U.S. firms out of any costs they might incur from it?

The bill that got through the Senate Saturday morning gives the Secretary of Transportation authority to prohibit U.S. airlines from complying with a European law requiring airplanes that land or take off from European airports to account for and limit their flights’ global warming pollution through an emissions trading system.

The bill also requires the Secretary of Transportation to hold the airlines "harmless" – meaning bail them out – of any costs, including both the costs of complying with the European law, estimated to be trivial, and the costs of not complying (the latter could be steep).

With the passage of the Senate bill, the spotlight now zooms onto the Administration, in particular the Secretary of Transportation, and the talks at the International Civil Aviation Organization (ICAO) to reach a global agreement to limit aviation emissions — and to reach it quickly.

Below are some questions we have received on this bill, and my responses.

What is it in the European law that runs so counter to U.S. policy that it justifies this drastic action?

The airlines argue that the law violates U.S. sovereignty because the law holds airlines accountable for the entire pollution of the flights – even pollution occurring in the airspace over the sovereign territory of the United States.

But the fact that the European law applies to the entirety of the flight cannot be the reason it is counter to U.S. policy.

In fact, it's expressly the policy of the United States to apply our laws to a whole host of issues through the entirety of flights coming in and out of the U.S. – including portions of flights wholly over foreign sovereign territory. U.S. laws governing everything from security screening, to banning liquids and gels, to barring gambling apply to flights landing and taking off from U.S. airports, including the portions of the flights occurring in and over foreign lands.

Could the reason the European law is so counter to U.S. policy be that, as the U.S. airlines allege, it's a tax?

The law does require flights landing or taking off from European airports to hold sufficient pollution allowances to cover the amount of pollution coming out of the backs of their engines, and if they don't have enough allowances, they can buy them from European governments.

But it can't be that flight taxes per se are objectionable to the U.S. government. After all, Congress makes every traveler coming in and out of the United States pay a $16.70 international departure and arrival tax.

The aviation industry is world's seventh largest polluter. With the passage of the Senate bill, the spotlight now zooms onto the Administration, in particular the Secretary of Transportation, and the talks at the International Civil Aviation Organization (ICAO) to reach a global agreement to limit aviation emissions– and to reach it quickly.

And as courts have already found, the EU law isn't actually a tax: if the airlines don't want to, they don't have to send a cent to European government coffers. They can simply fly more efficiently. And if they don't want to do that, they can buy and sell pollution credits in the global marketplace without ever paying European governments a dime – and maybe even make money in the process.

In the run-up to the passage of the airline pollution bailout bill, a few changes were made that tell the Secretary of Transportation, if he does ban the airlines from complying with the European law, to reconsider his ban if the Europeans amend their law, or if an international agreement is reached to address this pollution, or if the U.S. adopts a regulation (which could take years).

The international agreement provision is the interesting part – it puts pressure on the International Civil Aviation Organization (ICAO) to amp up its action on climate change and agree on a global program at its next triennial Assembly in 2013.

But other parts of the bill – including those that bail the airlines out of any costs of complying – or not complying – with the law, remain.

Minor changes to the bill ensure that those costs won't be paid out of the airlines' taxpayer-funded trust fund, but taxpayers could still be on the hook if the airlines win a court judgment that the Secretary is required to hold them harmless, as the bill requires, so that the monies come from the taxpayer-funded Judgment Fund, a part of the U.S. Treasury used to satisfy court judgments against the United States.

What if the Secretary invokes his authority under a little-known airline competitiveness law that allows him to impose retaliatory penalties against airlines from countries that the Secretary finds are treating U.S. airlines “unreasonably”?

And what if the Secretary uses that authority to hold U.S. airlines harmless from the European law by dunning Lufthansa, British Airways, and other European airlines for the U.S. airlines’ compliance or non-compliance costs?

Those companies would likely protest in court. But if the Secretary's cost-dunning order were upheld, Europe could retaliate under its own airline competitiveness law and impose retaliatory fees on U.S. airlines.

Then you have a full-scale trade war. And since U.S. airlines have both code-share and revenue-share agreements with European carriers, a trade war on this issue amounts to shooting themselves in the wing.

What happens next?

A similar bill has already passed the House of Representatives, but because the bills have some differences, the House will have to take it up again when Congress reconvenes after the November elections.

Could it be that the part of the bill that's antithetical to U.S. policy is really the fact that the European law addresses climate change?

Maybe that's the case for the U.S. Congress at this sad juncture in our nation's history.

But is it also the case that the Obama Administration is so opposed to climate action that after 15 years of fruitless international efforts to curb aviation's global warming pollution, the Administration would stand in the way of other nations' efforts to address that pollution?

We don’t believe so. And if the bill passes, we and others will certainly be encouraging the Administration to find that it is in our public interest lies in striking a real deal in ICAO, rather than turning U.S. airlines into scofflaws at taxpayer – or the flying public’s – expense.

Airlines are pushing the U.S. to bring an "Article 84" lawsuit that would be counterproductive to the administration's goal of international action on reducing aviation emissions. Above: ICAO world headquarters. (Photo credit: Wikimedia Commons)

But behind the scenes, the airlines launched a different line of attack, badgering the U.S. administration to file an international legal case arguing that Europe’s program is illegal under international law.

The EU law that’s got the aviation industry so riled up is the only program in the world that sets enforceable limits on carbon pollution from aviation. That pollution is set to quadruple from 2005 levels by 2050 if left unregulated.

The industry is demanding that the U.S. government bring the case under Article 84 of the Chicago Convention on Civil Aviation, and adjudicate it in the International Civil Aviation Organization (ICAO), in Montreal, Canada.

Other courts are highly likely to defer to the opinion of these highly respected international jurists. It looks like what the airlines want to do is press the administration to use taxpayer money to litigate a case that the airlines’ own attorneys already lost.

That kind of lawsuit would be decidedly counterproductive if the administration’s real goal is – as it has repeatedly stated – to get action in ICAO on limiting greenhouse gas emissions from aviation.

Article 84 is a protracted process – it can grind on for years. While that might be good for lawyers, it would divert the time and energies of the ICAO secretariat and the national delegates to ICAO. The delegates and staff would have to deal with the litigation instead of solving the tough technical problems and bridging the deep political differences needed in order to get a strong agreement in ICAO on cutting aviation pollution.

There’s also a possible legal conundrum in the Article 84 process that could prevent the case from being heard even if it were filed. ICAO’s Rules for the Settlement of Differences, Chap. III, Art. 6. says that cases shall be heard by

five individuals who shall be Representatives on the Council of Member States not concerned in the disagreement.

What that legalese means in English is that, under the rules of Article 84, five members of the 36-member ICAO Council sit as judge and jury when one country brings a complaint against another – but under those same rules, any country that is a party to the dispute cannot have its representative participate in deciding the case.

Since all the EU countries are parties to the dispute and since all but three of the ICAO Council Member States signed the New Delhi and Moscow declarations opposing the EU law and thus are also “concerned in the disagreement” by virtue of having taken a position on the issues in the case, only three countries – Burkina Faso, Morocco, and Swaziland – would be left to adjudicate the case. That’s short of the five impartial states needed under the rules.

Trying to use Article 84 to deal with the differences between countries in ICAO over how to limit aviation pollution is really beyond the scope of the Article, since it was designed to address disputes between two countries, not broad policy disagreements among large groups of countries.

We think rather than plotting how to slow down an already leaden process, the better path would be for the U.S. to accelerate and broaden the discussions that the State Department and Department of Transportation convened last week, and get down to creative solutions for cutting the pollution that’s heating up the planet.

Above: the emissions-reductions proposal of the International Air Transport Association (green), and business-as-usual emissions (red).

We think that’s a reasonable place to start, as long as the talks move forward, not backtrack. The 2010 ICAO resolution itself recognizes the proposal is not enough. It says:

the aspirational goal of 2 per cent annual fuel efficiency improvement is unlikely to deliver the level of reduction necessary to stabilize and then reduce aviation’s absolute emissions contribution to climate change, and that goals of more ambition will need to be considered to deliver a sustainable path for aviation.

The industry’s proposal – the green line to the right – is weaker than the ICAO resolution, and allows emissions to continue to grow.

The yardstick we’ll be using to measure any progress in the meeting over the next two days is: are countries speaking in terms of reducing aviation’s total emissions, with binding targets?

Or are the talks backtracking to the industry’s lowest common denominator?

BEGIN ORIGINAL POST

U.S. climate envoy Todd Stern will be in the hot seat tomorrow — in more ways than one.

U.S. Special Envoy for Climate Envoy Todd Stern is hosting a meeting in Washington of 17 countries to discuss emissions from international aviation.

Airlines are the world's seventh largest planetary polluter.

Everyone from the aviation industry to governments to environmental groups says that the best way to deal with pollution from airplanes is through the Montreal-based International Civil Aviation Organization, or ICAO. (It’s pronounced "eye-kay-oh" or "ih-cow" … you say tomayto, I say tomahto…)

ICAO was tasked by world governments way back in 1997 to come up with a solution to this problem. Unfortunately, they’ve been dithering about it since your teenager was a toddler.

Meanwhile, in 2003, Europe suffered a climate catastrophe — a massive heat wave that killed more than 40,000 people.

Europe got serious about climate security after the 2003 heat wave. It enacted a law putting most of its industry under emissions caps.

Aviation basically got a ten-year grace period from that cap. But this year, for the first time, all planes landing or taking off from European airports will have to reduce their climate pollution. Those that don’t comply will face tough sanctions.

The law is causing a lot of complaining from the U.S.-based airlines, including United, American, and Delta.

To hear them squawk, you'd think Europe's aviation law meant “The End Is Nigh.”

But let's take a deep breath here.

The EU law only requires airlines to cut their pollution by 5 percent.

Economists commissioned by the U.S. Federal Aviation Administration to assess the impact on U.S. airlines found that the EU law might … I repeat, might … cost as much as $6 on a roundtrip ticket from the U.S. to Europe.

That's the same as the cost of a beer on a Delta or United flight.

Oh, and the economists said "might" because they found that — ifthe airlines met the EU law by flying more efficiently — they could actually make money from it.

So why is this so controversial?

Because … while Stern's meeting is aimed at coming up with new ideas for how ICAO can move forward, and while the EU's law is actually nudging ICAO in that direction … the U.S. airlines have other ideas.

Aviation is the world's seventh largest polluter , but U.S. airlines are still trying to get out of complying with Europe's anti-pollution law. (Sources: International Civil Aviation Organization, International Energy Agency, United Nations Environment Programme)

United, American, Delta and their trade association are pressing to have the meeting focus on how to bring legal action against the EU, rather than focus on ways to make progress in ICAO. Specifically, they’re pushing for agreement to bring legal action under Article 84 of ICAO's governing treaty.

So the airlines are acting as if a $6 ticket surcharge is the equivalent of a massive human rights violation. (Just keep in mind airlines generally charge several times that much for a checked bag.)

That's what makes Stern's meeting this week so hot.

Washington didn't even invite any European countries to the table. Maybe it's because the airlines fear that with Europeans in the room, countries might actually start talking seriously about how to reach an agreement in ICAO that's as effective in cutting pollution as the EU law. (The EU has already said it will waive its law when — or if — ICAO does reach such an agreement.)

We're hoping the talks will illuminate some new paths forward. But against the backdrop of all the wacky weather Washington's had lately, the last thing we need here right now is “more heat than light.”